How Can I Make My Nonprofit More Data-Driven?
As with any traditional for-profit business, a nonprofit can benefit from using data to inform its decisions about spending, fundraising, retention, and more. You can optimize everything from marketing campaigns to HR policies in your nonprofit organization through the collection and analysis of statistics and other data.
In this overview, we discuss how data can give your organization a competitive edge. In addition, we also share various practical tools and strategies for data collection and analysis.
- Why Data-Driven Nonprofits Are More Effective
- Data Visualization
- How To Start Using Data as a Nonprofit
- Final Thoughts
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Why Data-Driven Nonprofits Are More Effective
Data-driven nonprofits have the ability to not only survive, but thrive. There is more to making decisions than simply going on a gut feeling. To truly be effective, nonprofit leaders must understand the why and the how behind every move they make. This is where data collection comes in.
To make an impact with marketing, you have to reach your target audience. And to define your target audience, you need data. Oftentimes, you have a demographic you are trying to speak to personally. For example, the marketing you use for your beneficiaries is different from the marketing you use with your funders. And communicating with repeat donors looks different than talking to new donors.
Corinne is quickly realizing the potential of being data-driven!
Categorizing your demographics is just the start. You should also make a data-driven decision about how to reach your various audiences. If your typical donor is a man over 75 years old, you would not use TikTok to reach him; you would send him a physical letter in the mail or call him using your nonprofit phone system.
Organizations can also use data to reduce costs. Gathering information on how your organization spends money leads to transparency in departmental spending. Seeing where there are hemorrhages enables you to make significant changes in how you use your resources.
Managers and other leaders in nonprofit organizations must prioritize the needs of the community they serve. By reducing waste in overhead costs, you open up more funding for what really matters: your mission.
The best decisions are informed decisions. By using historical data to inform future projections, you can positively influence the health of every facet of your nonprofit. For example, employee retention in your nonprofit organization may be low. With the right data, you can head off employee churn by addressing any productivity obstacles or other challenges that are plaguing your staff.
But optimized decision making addresses more than simply employee turnover in nonprofit organizations. The same concept applies to any policy or system. Another example lies with nonprofit HR software. You can make more effective decisions about spending, hiring, marketing, and more because you can see the numbers in the program. You may not even need to spend money on this, as you can find free nonprofit HR software.
Here are some other topics you can collect data about to improve the culture of your nonprofit:
Who is visiting your website
Who is interacting with your social media channels
Who is opening your email communications
How employees are allocating their time
What perks are members using
Which revenue-generating programs are seeing a return on investment (ROI)
Which fundraisers are seeing an ROI
Which outsourced nonprofit HR services are seeing an ROI
Pro Tip: Always use numbers instead of assumptions to inform your decision making. By doing so, you build trust with the public. In our data-driven culture, nonprofits must be transparent with their stakeholders, which means showing them the receipts.
Data visualization is the representation of information through visual means. It allows you to facilitate understanding and draw insights. You can visualize your data with:
Working for a nonprofit, you can use data visualization in nearly any situation. For example, maybe you are an HR professional who is trying to explain to the leadership team how to staff your nonprofit organization. The leaders probably do not want to read a fat binder full of all of your data and reasoning for hiring for certain roles. Replace all of that complexity with one chart, and see how quickly you get results!
Anthony is amazed by all the different types of data visualizations he can leverage!
Pro Tip: An important thing to understand about data is that the longer you collect it, the more you can refine it. With years of data, you have more information to make more accurate projections.
How To Start Using Data as a Nonprofit
So, data has value; you understand that now. But, what does collecting and using data look like in practice? Here, we pretend to be data scientists and take a look at some helpful tools.
Data Collection Tools
You can collect data in a number of ways. Simply keeping written records helps. However, in today’s information age, technology is king. You can create spreadsheets in Excel, but this is time-consuming. That is why we recommend investing in a specific software or program to do the work for you.
Different applications help with different types of data. A few categories of information we recommend focusing on include:
- Membership management: Springly and Wild Apricot are two popular membership management programs on the market.
- Accounting and bookkeeping: There is some overlap here with membership management. For example, Springly offers an accounting suite. However, you can also use accounting-specific softwares, such as QuickBooks and MoneyMinder.
- Social media engagement: To see how successful your marketing efforts are, try Google Analytics or Hootsuite.
Data Visualization Tools
When you have the data, the next step is to present it. You can do this with:
Oftentimes, you do not need to purchase both collection and visualization tools. The data collection tool you already pay for likely has a dashboard and other visualization capabilities as well.
Pro Tip: When you are using data visualization to present your case, remember that simplicity is key. The important part is to focus your audience’s attention on the point you are trying to make. Using too many labels or including too many variables can cloud your point.
From choosing your nonprofit office space to conducting your nonprofit HR training, data can help inform every decision you make. While business is not a science, there is an evolving relationship between these two disciplines; businesses need data to make decisions that prioritize profitability — or, in the case of nonprofits, prioritize their communities.
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💡What tools can I use to collect data for my nonprofit?
There are a number of tools that can collect data. Excel is a simple and inexpensive choice. However, you can also try programs that are specific to membership, accounting, and social media. Find out more.
🔑 How do I use data to inform decisions in my nonprofit?
First, identify the question that you are looking to answer. Once you know that, you can collect any related data. Then, listen to the data. Ask yourself whether the data is leaning in a clear direction. Find out more.
📝 How can I use data to market my nonprofit?
By collecting data to answer questions about your key demographics and their preferred communication channels, you can refine your outreach techniques to appeal to them. Find out more.